What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-10 compared with 2023-05-11 · 124 added, 123 removed, 99 unchanged (71% of the section changed)

64 unchanged sentences

and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30,

of Operations – For the three months ending March 31, 2023, and 2022

revenue for the three months ended March 31, 2023, and 2022 was $16,073,789 and $11,746,017, respectively, an increase of $4,327,380,

Loss from continuing operations for the three months ended March 31, 2023, was $553,761 compared to $4,116,783 for the three

months ended March 31, 2022, a decrease on the loss of $3,563,022, or 87%.

of Operations – For the three months ending June 30, 2023, and 2022

revenue for the three months ended June 30, 2023, and 2022 was $14,730,140 and $12,108,904, respectively, an increase of $2,621,236,

Loss from continuing operations for the three months ended June 30, 2023, was $1,185,400 compared to income of $106,599 for the

three months ended June 30, 2022, a decrease of $1,291,999, or 1,212%.

Total revenue for the quarter increased, as compared to total

revenue in the same period last year, due to increased demand for the Company’s products and services.

Loss from operations decreased

due to increased revenues as compared to the same period in the prior year.

Security segment revenues for the three months ended March 31, 2023, increased by $3,173,789 or 47% to $9,913,898 from $6,740,109 for

the three months ended March 31, 2022.

Income from continuing operations

became a loss due to other income related to realized and unrealized gain on marketable securities during the same period in the prior

Security segment revenues for the three months ended June 30, 2023, increased by $2,374,366 or 36% to $9,015,279 from $6,640,913 for

the three months ended June 30, 2022.

This increase is due to an increased demand for the Security segment’s products and services.

Industrial Services segment revenues for the three months ended March 31, 2023, increased by $1,153,591 or 23%, to $6,159,499 from $5,005,908

for the three months ended March 31, 2022.

This increase is mainly due to increased demand for the segment’s

products and services.

Profit for the three months ended March 31, 2023, was $7,338,481 or 46% of revenues as compared to gross profit of $3,769,781 or 32%

of revenues for the three months ended March 31, 2022.

profit in our Security segment was $5,122,290 or 52% of the segment’s revenues for the three months ended March 31, 2023, as compared

to gross profit of $2,303,763 or 34% of the segment’s revenues for the period ended March 31, 2022.

Industrial Services segment revenues for the three months ended June 30, 2023, increased by $246,870 or 5%, to $5,714,861 from $5,467,991

for the three months ended June 30, 2022.

This increase is mainly due to increased demand for the segment’s products and services.

Profit for the three months ended June 30, 2023, was $6,480,643 or 44% of revenues as compared to gross profit of $5,040,107 or 42% of

revenues for the three months ended June 30, 2022.

profit in our Security segment was $4,404,836 or 49% of the segment’s revenues for the three months ended June 30, 2023, as compared

to gross profit of $3,383,241 or 51% of the segment’s revenues for the period ended June 30, 2022.

Gross profit as a percentage

of revenues increased in the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to price increases

implemented throughout the segment in response to rising costs of our goods and transportation costs.

profit in our Industrial Services segment was $2,216,191 or 36% of the segment’s revenues for the three months ended March 31,

2023, as compared to gross profit of $1,466,018or 29% of the segment’s revenues for the period ended March 31, 2022.

as a percentage of revenues increased in the three months ended March 31, 2023, compared to the three months ended March 31, 2022, was

primarily due to lower subcontractor costs.

of revenues decreased in the three months ended June 30, 2023, compared to the three months ended June 30, 2022, due to negotiated terms

on some sales.

profit in our Industrial Services segment was $2,075,807 or 36% of the segment’s revenues for the three months ended June 30, 2023,

as compared to gross profit of $1,656,866 or 30% of the segment’s revenues for the period ended June 30, 2022.

Gross profit as

a percentage of revenues increased in the three months ended June 30, 2023, compared to the three months ended June 30, 2022, was primarily

due to lower subcontractor costs.

and Administrative Expenses

and administrative expenses for the three months ended March 31, 2023, decreased $106,402 or 2% to $5,318,267 from $5,424,669 for the

three months ended March 31, 2022.

General and administrative expenses as a percentage of revenues were 33% and 46% of revenues for the

three-month periods ended March 31, 2023, and 2022, respectively.

The reduction in general and administrative expenses is mainly related

to reduced employee costs and legal expenses.

and administrative expenses for the three months ended June 30, 2023, decreased $4,569 or less than 1% to $5,376,960 from $5,381,529

for the three months ended June 30, 2022.

General and administrative expenses as a percentage of revenues were 37% and 44% of revenues

for the three-month periods ended June 30, 2023, and 2022, respectively.

The decrease in general and administrative expenses is mainly

related to decreased general and administrative expenses and professional fees expenses offset by increased personnel and insurance expenses.

and Development Expenses

and Development expenses for the three months ended March 31, 2023, were $1,615,341 compared to $1,239,334 for the three months ended

March 31, 2022, an increase of $376,007 or 30%.

and Development expenses for the three months ended June 30, 2023, were $1,049,909 compared to $1,189,875 for the three months ended

June 30, 2022, a decrease of $139,966 or 12%.

Research and Development expenses are primarily related to the Security Segment’s

development of next generation solutions associated with security and surveillance systems software.

expense for the three months ended March 31, 2023, was $958,634, as compared to other expense of $1,222,561 for the three months ended

March 31, 2022.

Other expense for the three months ended March 31, 2023, was mainly driven by interest on the Company’s debt, offset

by a one-time income related to employee retention credits of $416,502.

Income/Expense

expense for the three months ended June 30, 2023, was $1,219,533, as compared to other income of $1,389,955 for the three months

ended June 30, 2022.

Other expense for the three months ended June 30, 2023, was mainly driven by interest on the Company’s

Other income for the three months ended June 30, 2022, included one-time realized and unrealized gain on marketable securities

of $2,075,125.

for Income Taxes

the three months ended March 31, 2023, and 2022, the Company took no provision on income taxes.

The provision for income tax is based

upon the projected income tax from the Company’s various U.S.

and international subsidiaries that are subject to their respective

income tax jurisdictions and the Company’s projected ability to utilize net loss carryforwards.

the three months ended June 30, 2023, the Company had income tax expense of $19,641 and a benefit of $247,941 for the three months ended

June 30, 2022.

The provision for income tax is based upon the projected income tax from the Company’s various U.S.

and international

subsidiaries that are subject to their respective income tax jurisdictions and the Company’s projected ability to utilize net loss

carryforwards.

Income/(loss)

from Discontinued Operations

Company had income on discontinued operations of $14,232.

This income is mainly related to the recognition of the royalties due from

Losses on discontinued operations for the three months ended March 31, 2022 were $685,140 attributable to the operations of

the Cemtrex brands discussed in Note 3.

of Operations – For the six months ending March 31, 2023, and 2022

revenue for the six months ended March 31, 2023, and 2022 was $28,043,639 and $21,159,412, respectively, an increase of $6,884,227, or

Loss from continuing operations for the six months ended March 31, 2023, was $3,650,514 compared to $7,887,648 for the six months

ended March 31, 2022, a decrease on the loss of $4,237,134, or 54%.

the three months ended June 30, 2023, the Company had income on discontinued operations of $13,281.

This income is mainly related to

the recognition of the royalties due from CXR, Inc.

Losses on discontinued operations for the three months ended June 30, 2022, were

$838,301 attributable to the operations of the Cemtrex brands discussed in Note 3.

of Operations – For the nine months ending June 30, 2023, and 2022

revenue for the nine months ended June 30, 2023, and 2022 was $42,773,779 and $33,268,316, respectively, an increase of $9,505,463, or

Loss from continuing operations for the nine months ended June 30, 2023, was $4,835,914 compared to $7,781,049 for the nine months

ended June 30, 2022, a decrease on the loss of $2,945,135, or 38%.

Total revenue for the period increased, as compared to total revenue

in the same period last year, due to increased demand for the Company’s products and services.

Loss from operations decreased due

to increased revenues and improved gross profit margins as compared to the same period in the prior year.

Security segment revenues for the six months ended March 31, 2023, increased by $5,819,110 or 52% to $16,918,642 from $11,099,532 for

the six months ended March 31, 2022.

Loss from continuing operations

decreased due to increased revenues and improved gross profit margins as compared to the same period in the prior year.

Security segment revenues for the nine months ended June 30, 2023, increased by $8,193,476 or 46% to $25,933,921 from $17,740,445 for

the nine months ended June 30, 2022.

This increase is due to an increased demand for the Security segment’s products and services.

Industrial Services segment revenues for the six months ended March 31, 2023, increased by $1,065,117 or 11%, to $11,124,997 from $10,059,880

for the six months ended March 31, 2022.

This increase is mainly due to increased demand for the segment’s

products and services.

Profit for the six months ended March 31, 2023, was $12,381,096 or 44% of revenues as compared to gross profit of $6,992,031 or 33% of

revenues for the six months ended March 31, 2022.

profit in our Security segment was $8,525,980 or 50% of the segment’s revenues for the six months ended March 31, 2023, as compared

to gross profit of $4,095,828 or 37% of the segment’s revenues for the six-month period ended March 31, 2022.

Gross profit as a

percentage of revenues increased in the six months ended March 31, 2023, compared to the six months ended March 31, 2022, due to price

increases implemented throughout the segment in response to rising costs of our goods and transportation costs.

profit in our Industrial Services segment was $3,855,116 or 35% of the segment’s revenues for the six months ended March 31, 2023,

as compared to gross profit of $2,896,203 or 29% of the segment’s revenues for the period ended March 31, 2022.

Industrial Services segment revenues for the nine months ended June 30, 2023, increased by $1,311,987 or 8%, to $16,839,858 from $15,527,871

for the nine months ended June 30, 2022.

This increase is mainly due to increased demand for the segment’s products and services.

Profit for the nine months ended June 30, 2023, was $18,859,530 or 44% of revenues as compared to gross profit of $12,032,138 or 36%

of revenues for the nine months ended June 30, 2022.

profit in our Security segment was $12,928,607 or 50% of the segment’s revenues for the nine months ended June 30, 2023, as

compared to gross profit of $7,479,069 or 42% of the segment’s revenues for the nine-month period ended June 30, 2022.

profit as a percentage of revenues increased in the nine months ended June 30, 2023, compared to the nine months ended June 30,

2022, due to price increases implemented throughout the segment in January 2023 in response to rising costs of our goods and a

reduction in transportation costs in 2023, compared to the same period in 2022.

profit in our Industrial Services segment was $5,930,923 or 35% of the segment’s revenues for the nine months ended June 30, 2023,

as compared to gross profit of $4,553,069 or 29% of the segment’s revenues for the period ended June 30, 2022.

Gross profit as

a percentage of revenues increased in the six months ended March 31, 2023, compared to the six months ended March 31, 2022, was primarily

a percentage of revenues increased in the nine months ended June 30, 2023, compared to the nine months ended June 30, 2022, was primarily

due to lower subcontractor costs.

and Administrative Expenses

and administrative expenses for the six months ended March 31, 2023, decreased $231,239 or 2% to $10,482,605 from $10,713,844 for the

six months ended March 31, 2022.

and administrative expenses for the nine months ended June 30, 2023, increased $361,229 or 2% to $16,456,602 from $16,095,373 for the

nine months ended June 30, 2022.

General and administrative expenses as a percentage of revenues were 38% and 48% of revenues for the

six-month periods ended March 31, 2023, and 2022, respectively.

The reduction in general and administrative expenses is mainly related

to reduced employee costs and legal expenses.

nine-month periods ended June 30, 2023, and 2022, respectively.

The increase in general and administrative expenses is mainly related

to increased employee costs and insurance expenses.

and Development Expenses

and Development expenses for the six months ended March 31, 2023, were $3,445,054 compared to $2,471,008 for the six months ended March

and Development expenses for the nine months ended June 30, 2023, were $3,895,717 compared to $3,660,883 for the nine months ended June

30, 2022, an increase of $234,834 or 6%.

1 unchanged sentence

of next generation solutions associated with security and surveillance systems software.

expense for the six months ended March 31, 2023, was $2,103,951 as compared to an expense of $1,694,827 for the six months ended March

Other expense for the six months ended March 31, 2023, was mainly driven by interest on the Company’s debt, offset by

expense for the nine months ended June 30, 2023, was $3,323,484, as compared to an expense of $304,872 for the nine months ended June

Other expense for the nine months ended June 30, 2023, was mainly driven by interest on the Company’s debt, offset by

a one-time income related to employee retention credits of $416,502.

Other expense for the six months ended March 31, 2022, included

the gain on the forgiveness of our PPP loans of $971,500.

Other expense for the nine months ended June 30, 2022, included

the gain on the forgiveness of our PPP loans of $971,500 and the realized and unrealized gain on marketable securities of $2,235,738.

for Income Taxes

the six months ended March 31, 2023, and 2022, the Company took no provision on income taxes.

The provision for income tax is based upon

the projected income tax from the Company’s various U.S.

and international subsidiaries that are subject to their respective income

tax jurisdictions and the Company’s projected ability to utilize net loss carryforwards.

the nine months ended June 30, 2023, and 2022, the Company had income tax expense of $19,641 and a benefit of $247,941 on income taxes.

The provision for income tax is based upon the projected income tax from the Company’s various U.S.

and international subsidiaries

that are subject to their respective income tax jurisdictions and the Company’s projected ability to utilize net loss carryforwards.

from Discontinued Operations

2 unchanged sentences

Technologies, and Cemtrex XR, Inc.

The net loss of $878,284 for the six months ended March 31, 2023, the recognition of discounted royalties

of $19,151, and the net gain on the recovery of cash from Vicon Industries Ltd.

Losses on discontinued operations for the

six months ended March 31, 2022 were $1,444,098 attributable to the operations of the Cemtrex brands discussed in Note 3.

Company’s business and operations have been affected by inflation during the periods for which financial information

is presented.

In response, the Company has instituted price increases and initiated cost-saving measures to mitigate the effects

of inflation on operations.

The net loss of $879,727 attributable to the operations of the Cemtrex brands, the recognition of

discounted royalties of $33,875, and the net gain on the recovery of cash from Vicon Industries Ltd.

Losses on discontinued

operations for the nine months ended June 30, 2022, were $2,282,399 attributable to the operations of the Cemtrex brands discussed in

Company’s business and operations have been affected by inflation during the periods for which financial information is presented.

In response, the Company has instituted price increases and initiated cost-saving measures to mitigate the effects of inflation on operations.

and Capital Resources

capital was $383,939 at March 31, 2023, compared to working capital of $6,252,972 at September 30, 2022.

This includes cash and equivalents

and restricted cash of $7,279,334 at March 31, 2023, and $11,473,676 at September 30, 2022.

The decrease in working capital was primarily

due to the Company’s sale of assets and liabilities of discontinued operations and an increase in accounts payable, accrued expenses,

and deferred revenue during the six months ended March 31, 2023.

used by operating activities for continuing operations for the six months ended March 31, 2023 and 2022 was $5,383,060 and $6,152,012,

capital deficit was $967,489 at June 30, 2023, compared to working capital of $6,252,972 at September 30, 2022.

This includes cash and

equivalents and restricted cash of $6,434,112 at June 30, 2023, and $11,473,676 at September 30, 2022.

The decrease in working capital

was primarily due to the Company’s sale of assets and liabilities of discontinued operations and an increase in accounts payable,

accrued expenses, and deferred revenue during the nine months ended June 30, 2023.

used by operating activities for continuing operations for the six months ended June 30, 2023, and 2022 was $5,394,048 and $10,669,927,

respectively.

Cash provided by operating activities for discontinued operations for the six months ended March 31, 2023 was $2,488,144,

compared to using cash of $1,310,586 for the six months ended March 31, 2022.

receivables increased by $1,872,272 or 35% to $7,271,488 at March 31, 2023, from $5,399,216 at September 30, 2022.

Cash provided by operating activities for discontinued operations for the nine months ended June 30, 2023, was $2,474,863,

compared to providing cash of $41,562 for the nine months ended June 30, 2022.

receivables increased by $2,108,539 or 39% to $7,507,755 at June 30, 2023, from $5,399,216 at September 30, 2022.

The increase in trade

receivables is attributable to increased sales in the Security segment.

used by investment activities for continuing operations for the six months ended March 31, 2023 was $252,706 compared to $5,425,408 for

the six months ended March 31, 2022.

Cash used by investing activities for discontinued operations for the six months ended March 31,

2022 was $2,349.

Investing activities for the six months ended March 31, 2023 were driven by the Company’s purchase of property

and equipment.

used by financing activities for the six months ended March 31, 2023, was $920,127 compared to providing cash of $6,484,337 for the six

months ended March 31, 2022.

used by investment activities for continuing operations for the nine months ended June 30, 2023, was $735,265 compared to providing cash

of $792,195 for the nine months ended June 30, 2022.

Cash used by investing activities for discontinued operations for the nine months

ended June 30, 2022, was $39,388.

Investing activities for the nine months ended June 30, 2023, were driven by the Company’s purchase

of property and equipment.

used by financing activities for the nine months ended June 30, 2023, was $1,280,991 compared to providing cash of $5,902,298 for the

nine months ended June 30, 2022.

Financing activities were primarily driven by payments on the Company’s debt.

Financing activities

for the six months ended March 31, 2022 were primarily driven by proceeds from the note payable issued in February of 2022.

our working capital and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going concern,

the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance

of common stock, thus reducing our cash requirement to meet our operating needs.

Additionally, the Company has recently sold unprofitable

brands, reducing the cash required to maintain those brands, reevaluated our pricing model on our Vicon brand to improve margins on those

products, and has effected a reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improved our

ability to potentially raise capital through equity offerings that we may use to satisfy debt.

In the event additional capital is raised

through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders.

Company believes these plans are sufficient to meet the capital demands of our current operations for at least the next twelve months,

the is no guarantee that we will succeed.

there is no guarantee that cash flow from our existing or future operations and any external capital that we may be able to raise will

be sufficient to meet our working capital needs.

We currently do not have adequate cash to meet our short or long-term needs.

The consolidated

financial statements do not include any adjustments relating to this uncertainty.

for the nine months ended June 30, 2022, were primarily driven by proceeds from the note payable issued in February of 2022.

our working capital deficit and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going

concern, the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through

the issuance of common stock, thus reducing our cash requirement to meet our operating needs.

Additionally, the Company has recently

sold unprofitable brands, reducing the cash required to maintain those brands, reevaluated our pricing model on our Vicon brand to improve

margins on those products, and has effected a reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets,

and improved our ability to potentially raise capital through equity offerings that we may use to satisfy debt.

In the event additional

capital is raised through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders.

While the Company believes these plans are sufficient to meet the capital demands of our current operations for at least the next twelve

months, there is no guarantee that we will succeed.

Overall, there is no guarantee that cash flow from our existing or future operations

and any external capital that we may be able to raise will be sufficient to meet our working capital needs.

We currently do not have

adequate cash to meet our short or long-term needs.

The consolidated financial statements do not include any adjustments relating to

this uncertainty.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis